Portugal approves online gaming regulation
Government sanctions new framework but tax regime casts doubt over potential size of market
Portugal’s government yesterday approved new online gaming regulations which will enable foreign operators to enter the regulated market for the first time.
The new framework, which opens up current monopoly Santa Casa de la Misericordia to outside competition, will become law once confirmed by the signature of President of Portugal AnÃbal António Cavaco Silva.
Despite industry pressure, the country’s tax regime will remain as previously set out with gaming to be levied at 15%-30% of revenues while sports betting will be taxed at between 8% and 16%.
The government said it expected to collect approximately 25m per year in tax while new market entrants could invest as much as 30m per year on commercial activities, such as media marketing and sponsorship deals.
However, some observers believe the tax regime may price some operators out of the market and lead to a shortfall in tax receipts. Last month, accountancy firm PricewaterhouseCooper said the turnover-based sports betting tax would cost the government 20m by 2018.
Gaming consultant Eduardo Morales-Hermo this morning described the tax regime as a “major problem” and could “ruin the expectations of the Portuguese government”.
“We all know that taxation based on the amounts played or turnover and the types that have been established, is not able to absorb sufficient volume of play within the scope of the regulation,” Morales-Hermo said.
“The Portuguese government is seriously wrong in the formula and the type of tax that has been established for interactive games and betting channels,” he added.
Portugal first announced plans to develop a liberalised online gaming framework in 2011 with early estimates suggesting the market could generate around 250m in revenues per year.